Mirkle Corporation Uses the Following Activity Rates from Its Activity-Based

question 3

Multiple Choice

Mirkle Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: $\begin{array}{llr}\text { Activity Cost Pools }&\text { Activity Rate }\\\text { Assembling products } & \$ 6.56 \text { per assembly hour } \\\text { Processing customer orders } & \$ 65.38 \text { per customer order } \\\text { Setting up batches } & \$ 82.84 \text { per batch }\end{array}$

Data for one of the company's products follow:

$\begin{array} { l l l } & & \text { Product P59G } \\ \text { Number of assembly hours } & 240 & \\ \text { Number of customer orders } & 48 & \\ \text { Number of batches } & 64 \end{array}$
- The company produced 4,000 units of product during the period. Direct materials cost $7.30 per unit and direct labor cost $5.45 per unit. How much total cost would be assigned to the 4,000 units of Product P59G using the activity-based costing system?

• A) $31,814.40
• B) $51,000.00
• C) $10,014.40
• D) $39,214.40
• E) $61,014.40

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Definitions:

Uncollectible Accounts

Debts owed to a company that are deemed uncollectable and written off as a bad debt expense.

Stockholders' Equity

The ownership stake of shareholders in a corporation, calculated as the value of the company's assets minus its liabilities.

Common Stock

A type of equity security that represents ownership in a corporation, usually carrying voting rights.

Shares Outstanding

Shares outstanding refer to the total number of a company's shares that are currently held by all its shareholders, including share blocks held by institutional investors and restricted shares.